Volatility in Fruit Prices Challenges: The Fruit Concentrate Value Chain

Changing lifestyles and growing food and beverage industry is driving the demand for fruit juices, thereby driving the demand for fruit concentrates. The juice concentrates market is projected to reach a value of USD93.94 billion by 2021 at a CAGR of 6.0 percent, according to a recent report by Markets and Markets. The market is driven by factors such as increasing demand for convenience food & beverage products, rising health consciousness among consumers, and use of juice concentrates as a substitute in the bakery & confectionery industry. The high growth potential in emerging markets and untapped regions provides new growth opportunities for market players.

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The increasing health awareness among consumers especially in regions such as North America, Europe, and Asia-Pacific has led consumers demand for beverages that have fruit and vegetable content in them, according to the Markets and Markets report. This in turn has led to the demand for fruit and vegetable concentrates in order to satisfy consumer’s demand.

Moreover, the hectic lifestyle of the consumers has resulted in the demand for convenience food & beverages that are easy to consume and this in turn has increased the production of those beverages that are healthy as well as convenient to consume. In addition, fruit juice concentrates in beverage act a convenient and suitable substitute for carbonated soft drinks and aerated drinks.

Due to high logistical and warehousing costs of fresh fruit juices, fruit concentrates entered the market to provide a larger shelf life and convenience use, according to a recent report by Mordor Intelligence. The bakery and confectionary industry, to meet the consumer demands for sugar substitutes sees fruit concentrates as a convenient option as this ingredient provides better texture, flavor, natural sweetening and maintain the nutritional content of the fruit.

“… leading producers of Pineapple concentrates are Thailand, Indonesia, Philippines, Brazil and China”

The fruit concentrates which are prepared after evaporation of water from fruit juices have major applications in beverages sector (carbonated soft drinks, energy drinks, nutrient rich water), bakery and confectionary products, dairy (flavored milk) and in other categories like baby food, savory and snacks, ice-cream, desserts etc. Beverages industry holds the maximum share in the fruit concentrate usage. Grapes and Lemon concentrates dominated the market in terms of value in 2013.

The report notes that Asia-Pacific is the largest market for fruit concentrates in 2014, followed by North America and Europe. The Asia-Pacific market is estimated to exhibit steady rise in demand, growing at 5.7 percent CAGR from 2015 to 2020. In apple concentrates supply, Poland accounts to more than 50 percent of processed apple supply in the EU region followed by Turkey, while China dominates globally. US, Brazil and Spain are major orange juice producers with Spain accounting to 20 percent of Orange fruit concentrate within EU.

The report states that the leading producers of Pineapple concentrates are Thailand, Indonesia, Philippines, Brazil and China. India dominates in the mango fruit concentrate exports and the maximum consumption is seen from South East Asian countries and Middle East. The biggest challenge in the fruit concentrate value chain is the volatility in the fruit prices. Minimizing the naturally occurring environmental patterns is a pressing concern and industries can start with reducing their carbon footprint.

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